How to save up for a bucket-list trip

November 03, 2023

No matter where your dream vacation will take you, reaching your destination requires careful planning and budgeting. Here’s where to start.

Unable to study abroad in college, Paula Pant started her first job at a small newspaper with a unique goal — to quit and travel for at least six months as soon as possible. “I realized that I didn’t necessarily need to go to school abroad, but I wanted to mimic the experience of living in another country,” says the host of the podcast “Afford Anything.”

After saving $25,000 in just three years, Pant bought a plane ticket to Cairo, traveled through Southeast Asia and drove across Australia, among many other adventures. Along the way, she gained valuable experience in saving and budgeting for bucket-list trips.

Even if you’re not going to the extreme of quitting your job to circle the world, saving for a major vacation takes careful planning. The cost of travel is up more than 10% from 2019, led by higher prices for hotels, dining and entertainment. Air fares, which spiked when travel picked up in 2022, have come back to earth. Still, a plane ticket to Europe can easily top $1,000 in peak season.

As Pant and other experts have found, making your travel dreams come true is possible — even on a tight budget. But you will need to diligently research the expenses and potentially rethink your spending to get there. “You have to make choices based on what matters to you, and depending on your life stage, that may be different than what society expects,” Pant adds.

Make a detailed travel budget

To give yourself a savings target, create a detailed budget for your dream trip well in advance. Estimate all your expenses. Those will include the big costs, such as airfare and ground transportation, be it in a rental car or on trains and busses (or gas for your own car if you’re taking a long road trip). In fact, getting to and from the destination — and around it — accounts for nearly half the cost of the typical U.S. family vacation. The next biggest costs are a place to stay and food. Smaller outlays to put on the list include tickets to events or attractions.

For an overseas trip, some of the costs may be unexpected: a passport (if you don’t have one) and visas, possible vaccinations, transaction fees for using an ATM or credit card abroad (1% to 3% of the total transaction) and the cost of using your cell phone. Many wireless providers offer international plans for about $10 a day, which can add up for a long vacation. You’ll also want to consider travel insurance, which can be a lifesaver, providing a way to limit the impact of unexpected expenses, such as a night in a hotel after a canceled flight. Some credit cards offer it as a perk.

Give yourself a long runway

Planning well in advance can help you save on major costs like airfare and hotels. Same goes if you can be flexible about your travel dates. The travel and personal finance blogger behind the website A Purple Life saved enough to retire at age 30 three years ago and travel to Thailand, live in Mexico for two months to learn Spanish, road-trip to multiple U.S. National Parks, and more. She starts researching and planning her trips months or even a year in advance. “I wanted to pretend I was a spontaneous person, but advance planning is better, cheaper and gives you more options for saving,” says the blogger.

What’s more, planning months or even a year or more ahead of your hoped-for departure date can give you time to build up points on a credit card to use for travel costs.

Get weird with your savings

Many experienced travelers save for major trips via a combination of cutting down on daily expenses and bringing in more income with a side hustle or a roommate. Significant changes to your lifestyle, like moving from a high- to low-cost area, can free up cash that you can put in the bank. Smaller changes like trading restaurant meals for cooking at home can help, too.

For Pant, the key is to “embrace being weird” as you look for ways to save. “If you have consciously thought about what’s important to you, then you can reprioritize your spending —even if it goes against the prevailing norm,” she says. In Pant’s case, that meant driving a $400 car and living in a tiny basement apartment while she saved for her post-college adventure. Even if you can’t go that far, don’t overlook out-of-the-box savings strategies like cutting your own hair, shopping at thrift stores and waiting as long as possible to upgrade your electronics.

Put your money to work

While you save up for a future trip, picking the right savings vehicle can help you reach your savings goal faster. For example, money market accounts and certificates of deposit (CDs) provide better interest rates than traditional savings accounts. The blogger behind A Purple Life uses a high-yield savings account, which also offers higher interest rates. However, each vehicle comes with different considerations. High-yield savings accounts, for instance, often have account minimums, while CDs have a fixed date of withdrawal. You’ll want to investigate your options and choose the one that works best for your timeline.

Ground your expectations

“When it comes to big bucket-list trips, people often have high expectations, and then they’re disappointed,” Pant says. It’s like planning a wedding and getting so wrapped up in the details you can’t enjoy the day. “You don’t want to bridezilla your trip,” she says. To prevent disappointment, Pant recommends resisting the urge to over-identify with the trip. Keep your expectations in check, and you’ll leave room for pleasant surprises.

A bucket-list trip is an investment in adventure, memories and fun. But as with any investment, good planning and smart choices about how to put your money to work make a big difference. Develop a smart strategy for both, and you’ll increase the chances that your travel dreams become a reality.

Learn more about ways U.S. Bank can help you save for that trip of a lifetime. Bon voyage!

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